The Disability Gap in Employment Rates in a Developing Country Context: New Evidence from Vietnam

Although disability prevalence is higher in low and middle-income countries, very little is known about disability and labor market experiences in this context. This is largely due to a lack of quality data on disability. This paper is the first to analyze employment rates and their determinants across disability status in a developing country, Vietnam, using nationally representative data and a high-quality disability measure based on the recommendation of the Washington Group on Disability Statistics. The association between disability and employment is further investigated by applying the non-linear decomposition method proposed by Fairlie (1999, 2003). The estimated disability gaps in full-time employment rates are 53 and 43 percentage points for men and women respectively. The decomposition analysis finds that only 8% to 27% of this gap can be explained by observed variables, signifying the importance of unobserved characteristics or factors that contribute to the disability gap and require additional attention.